If your business is growing and you need a dedicated office, storage, or workspace, there are three primary options to consider: buying, leasing, or building. Each route has its own set of benefits and drawbacks.

Here’s what to know before you commit.

Buying commercial real estate

Purchasing commercial real estate can be a smart move with a few key considerations.

Pros:

  • Equity: Building equity when you pay off the mortgage.
  • Tax benefits: Take advantage of tax credits and deductions
  • Brand credibility: Show the public that you’re a legitimate company with roots in the community.
  • Control: You hold control of the property for renovations, security, etc.

Cons:

  • Upfront cost: Requires a significant capital investment
  • Regulatory hurdles:  Dealing with state and county licensing and permit requirements.
  • Long-term commitment: It’s a serious commitment.
Leasing a space for your business

When leasing a property, you have more long-term flexibility but may also face certain limitations based on your landlord and lease.

Pros

  • Mobility: You have more portability than you would as an owner.
  • Predictable Costs: You’ll have a fixed monthly cost, which can help you plan more effectively.
  • Lower initial investment: The deposit will likely be much less than you’d need for a down payment for buying a property.

Cons

  • Rent increases:Your landlord can raise the rent.
  • Less control: You have more limitations on its use than you would as a buyer.
  • Space restrictions: You may be limited in what you can do to modify it..
Building a custom workspace 

You may be considering building commercial real estate specifically for your needs — a significant investment with advantages and drawbacks.

Pros

  • Customization: You can tailor the building and surrounding property to suit your business.
  • Strategic location: You pick the location that’s best for you.
  • Equity potential: By developing raw land, you can build equity over time and increase the property’s value.

Cons

  • High cost: Purchasing land and developing a building from the ground up can be a huge expense.
  • Potential delays: Building a property will require obtaining permits from your county or city.
  • Time investment: Depending on your location, it can take months or even years from start to finish.

Read the in-depth article on this topic: here.

At SouthEast Bank, we understand the needs of our small business neighbors. From commercial loans to equipment financing, our team can help you find the right solution to support your growth. Visit your local branch or explore our business banking solutions to get started.

Your financial journey starts with SouthEast Bank.

Olivia Johnson is marketing strategist for Southeast Bank.

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